Business
Within 2 to 3 years, lots of Mega-millionaires will come out of Africa
With the swagger of a new generation, Shoreline swept up former Shell assets in 2012 to join the vanguard of nigeria’s indigenous upstream revolution. Kola Karim, Group Managing Director and Chief Executive Officer of Shoreline Energy International spoke to The Africa Report.
The Africa Report: How are things changing in the oil sector with regard to the financing of projects?
Kola Karim: What is happening today is we’ve now got a commanding position as African corporates because of the paradigm shift in capital – the pool of capital is shifting. African banks and financial institutions can write cheques now. I can sit down and say: “GTBank, write me a cheque of $350 million,” done!
Shell and Chevron are getting out of onshore operations. How big is this and where is it leading?
These guys are just restructuring. Let me tell you something, they’re just ripping people off as well, but the reality is it’s an opportunity. There’s a great opportunity for people like us to build humongous companies in a short time. You will never find these opportunities again. It happened in Russia.
Mark my words, in two to three years you’ll see gazillionaires coming out of a place called Africa from the world of business. I’ll give you a typical example so you can follow this analogy well. Shell has about 36 onshore licences in Nigeria. Now, if you look at the history of the Niger Delta problems, these guys had to shrink their operations or stop working in a lot of places because of these problems, then 12 years ago they went deep offshore.
Shell was producing about 1 million barrels per day [bpd] from all these onshore/shallow water licences. Then they went deep offshore, and in one field called Bonga they knocked 250,000 barrels a day! So someone in The Hague is thinking ‘Hang on, why do I go through all this mess for 36 assets – some producing 3,000, 5,000, 15,000 [bpd] – if I can consolidate my position, go deep offshore where the guys from the Delta can’t reach me easily?’
So perhaps in about 10 years there won’t be any foreign companies operating onshore?
I don’t think in 10 years, I give it five.
